Airbus warns of lay-offs

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Airbus stepped up warnings of compulsory lay-offs as air travel fails to recover as expected from the coronavirus crisis, putting itself on a potential collision course with unions and the French government.

The warning in a letter to 130 000 staff from Chief Executive Guillaume Faury, seen by Reuters, marks a more pessimistic tone from the planemaker, which previously said only it could not rule out compulsory measures.

“I owe it to you to be transparent: it’s unlikely voluntary departures will be enough,” Faury wrote in the letter distributed last Friday.

Unions and the French government urge the Toulouse-based planemaker to avoid compulsory lay-offs as it sheds up to 15 000 posts to cope with plummeting travel demand.

Airbus repeatedly warned the outlook is uncertain as the industry’s worst crisis hits aircraft deliveries and weakens airline finances.

A disappointing rise in summer air travel in the northern hemisphere cast a fresh pall over the company’s biggest ever restructuring plans.

“Unfortunately, recovery in airline traffic over the summer period has not been at the level the industry was counting on,” Faury wrote.

“We must now prepare for a crisis probably even deeper and longer than previous scenarios suggested”.

The organisation representing most world airlines, the International Air Transport Association (IATA), said last week air traffic failed to recover as quickly as expected during July, a key part of the peak season for airline revenues.

July traffic was down 80% compared with the same month of 2019, compared with a 94% drop at the low point in April.

IATA says inconsistent border rules are hampering recovery, making it difficult for airlines to plan ahead.

Airbus reported solid deliveries for August, but industry sources say many aircraft are going straight into storage.

An Airbus spokesman confirmed  Faury issued a “general business update” to staff.

“This is part of constant dialogue between Airbus top management and employees, crucial in these challenging times to ensure transparency and share information with our global workforce,” the spokesman said by email.

An official with France’s CGT union accused Airbus of stoking up staff anxieties ahead of further labour negotiations starting in one week.

Airbus has so far launched an internal call for voluntary departures and early retirements, in a scheme expected to run until the end of the year.